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Methods of Collective Bargaining

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Market conditions driven by capitalism dictate that employers must minimize the costs of running their business interests. This results in attempts on the part of the management to cut costs by reducing wages of their employees or making them work long hours or letting the quality of their working conditions slide in order to save resources or letting them go whenever the company is going through a hard time. Apart from the fact that this is unacceptable to the employees, this is also not good for the economy as it will lose purchasing power in the long term as a result of the weakened middle class.

As a result, in industries such auto, steel or rail transport, employees tend to form into specific unions, which upon being recognized by the National Labor Relations Board, are accepted by the management as collective bargain agents. So basically the conditions that lead to collective bargaining stem from the reasoning that there is strength in numbers.

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Single employees lodging complaints with the management will not get a lot of attention. But if all the workers in a single plant stop working because they are not happy with the working conditions, then the management will have to sit up and take notice. As a result representatives from the management and representatives from the trade union come together to negotiate a deal which is mutually beneficial to the employers and to the employees. Stripped down to the basics, this is collective bargaining.

According to Edward J (2003), two methods are followed for collective bargaining. One is the traditional method in which one party comes to the table completely unaware of problems that the other party is facing. This creates a lot of antagonism as neither party is willing to concede anything because they have no appreciation of the problems facing the other party. So one party lays a proposal down, upon which the other party lays a counterproposal down and this process repeats several times before both parties, through trial and error, arrive at terms and conditions that are acceptable to both parties. However, inasmuch as there are hundreds in the trade union not all of whose interests receive adequate exposure through the representatives at the bargaining table, the terms and conditions that the union representatives signed off on are put to the vote for the employees. If the majority accepts the terms and condition arrived at, then the collective bargaining process concludes then and there successfully. Otherwise it’s back to the table for the union representatives and the management.

The traditional method is not widely used in the collective bargaining industries these days. The method preferred these days is the partnership method. According to this method, both the union representatives and the management representatives make an extensive study of the issues that each party is facing. As a result, the negotiations maintain a friendly tone throughout. This method is also known as interest-based bargaining. Inasmuch as each party’s interest is to arrive at an agreement that is beneficial not only to itself but is also easy to live with for the other party, interest-based bargaining creates a congenial atmosphere for the collective bargaining process.

According to Silva (1996), the key difference between industries where collective bargaining takes place (already identified) and industries such as retail and banking where collective bargaining does not take place is the way in which employee-employer relations are maintained. In the industries characterized by collective bargaining, maintaining mutually beneficial relations is an arduous process. In the auto industry for example, there may be many plants in which case the issue becomes whether negotiations should take place between all the plant employees and all the plant managers. Of course the grievances might be related to the working conditions of one specific plant. In that case, the process of collective bargaining takes place between the union representatives and the management representatives of that plant. However, if those grievances are company wide including all the plants in operation nationwide, then union and management representatives must come from all the plants. Depending on the details involved, these agreements can be single-plant single-employer or multi-plant single employer. Sometimes employees from a single plant can use coalition bargaining in these industries. Sometimes the grievances are industry-wide in which case a national union is formed and thus that union conducts negotiations with some employers in that specific industry selected as representatives. A critical consideration in the collective bargaining that takes place in these industries is what happens when both parties fail to reach an agreement even after repeated proposals and counter proposals. If that situation arises, then the union and the management have three courses of action available to them: fact finding or non-binding arbitration, mediation and arbitration. In the first case, a neutral third party goes on a fact-finding mission on the conclusion of which the third party lays down possible strategies for resolving the dispute. It is however not legally binding upon the negotiating parties to implement those strategies. In mediation as well, the negotiating parties are not legally bound to accept what the mediator says. In arbitration however, the arbiter’s say is final.

The fact that collective bargaining does not take place at Gottschalks Inc. means that the status of relations between employer and employee can suffer to the detriment of the employees. However, in non-unionized industries such as the one in which the company operates, there are not enough employees who could band together into a union. The fact of the matter is that forming unions in an industry where the core operations at best are maintaining a department store is not required. This is because the retail industry is mostly going online. As a result, the management community in the retail industry does not need to employ the level of manpower seen in the steel industry for example. Gottschalks is also going online with its operations. This means majority of the employees employed at the company are professionals who usually get good working conditions and thus do not bother about forming unions even if they are encouraged to by the government. Gottschalks also has audit committees and compensation charters and extensive governance rules and regulations which suffice for maintaining satisfactory working conditions for the executive officers. Therefore, the collective bargaining process, which is a necessary evil in the unionized industries, is something Gootschalks can afford to ignore and still maintain good relations between employees and the management.


Silva, Sriyan de (1996). Collective Bargaining Negotiations. Retrieved on December 10, 2007 from <http://www.ilo.org/public/english/dialogue/actemp/papers/1998/srscbarg.htm>.

Irish Congress of Trade Unions (2007). Collective Bargaining. Retrieved on December 10, 2007 from <http://www.ictu.ie/html/services/collbar.html>

Silva, Sriyan de (1996). Collective Bargaining Negotiations. Retrieved on December 10, 2007 from <http://www.ilo.org/public/english/dialogue/actemp/papers/1998/srscbarg.htm>.

Martin, Edward J. (2003). Labor Management, Collective Bargaining and the Public Sector: Collaborative Solutions in Alameda California. Retrieved on December 10, 2007 from <http://www.pamij.com/8-2/pam8-2-2.pdf>

State Employee Collective Bargaining. (2007). Retrieved on December 10, 2007 from <http://www.wslc.org/legis/stateemp.htm>

Carrell, Michael R. and Christina Heavrin J.D. (2007). Labor Relations and Collective Bargaining: Cases, Practices and Law. Prentice Hall.

Colosi, Thomas R. and Arthur Eliot Berkeley (2006). Collective Bargaining: How It Works and Why. Wiley.

Cite this Methods of Collective Bargaining

Methods of Collective Bargaining. (2016, Sep 21). Retrieved from https://graduateway.com/methods-of-collective-bargaining/

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